November 17, 20213 yr 4 minutes ago, TEW said: Keep reading. It's about production costs, like I said. dude, your definition literally has two requirements: a country that produces a small amount of a product or crop with high production costs and little or no profit .... we don't produce a small amount, so that invalidates any claim that we're a "marginal producer" regardless of what our production costs are. and we still profit off our oil despite high production costs because shipping costs can help offset. we're pumping oil out of the same region as it's being refined. you're just wrong on this man.
November 17, 20213 yr Just now, JohnSnowsHair said: dude, your definition literally has two requirements: a country that produces a small amount of a product or crop with high production costs and little or no profit .... we don't produce a small amount, so that invalidates any claim that we're a "marginal producer" regardless of what our production costs are. and we still profit off our oil despite high production costs because shipping costs can help offset. we're pumping oil out of the same region as it's being refined. you're just wrong on this man. Sure thing dude. This reminds me of when morons were arguing with me about the housing prices.
November 17, 20213 yr 2 minutes ago, TEW said: Sure thing dude. This reminds me of when morons were arguing with me about the housing prices. so again, your contention is the world's largest producer of crude oil is a "marginal producer" because its production costs are high. yes?
November 17, 20213 yr 22 minutes ago, TEW said: Sure thing dude. This reminds me of when morons were arguing with me about the housing prices. ^a maga moron just coming to the realization that he is illiterate
November 17, 20213 yr 31 minutes ago, JohnSnowsHair said: so again, your contention is the world's largest producer of crude oil is a "marginal producer" because its production costs are high. yes? Yes, the shale industry is where marginal supply comes from. Yes, this is because of production costs. Yes, this is largely a US industry.
November 17, 20213 yr The United States has more marginal oil fields than most oil producing countries. In that sense TEW is correct. But in practice, oil production in the United States has remained markedly stable despite oil price fluctuations. The shale consolidation that happened several years ago didn't result in massive amounts of oil field abandonments. They were just taken over by established companies that weren't leveraged. Many of those fields continued to produce.
November 17, 20213 yr 1 hour ago, TEW said: Yes, the shale industry is where marginal supply comes from. Yes, this is because of production costs. Yes, this is largely a US industry. We haven't been talking about shale. We've talking about our overall crude production, which you insist is a "marginal industry" for some reason. I know shale production is dependent on the market prices, because it's more expensive than other forms of oil production. But that doesn't make our overall oil production "marginal". It's laughable.
November 18, 20213 yr 11 minutes ago, JohnSnowsHair said: We haven't been talking about shale. We've talking about our overall crude production, which you insist is a "marginal industry" for some reason. I know shale production is dependent on the market prices, because it's more expensive than other forms of oil production. But that doesn't make our overall oil production "marginal". It's laughable. And what percentage of our oil production do you think is from shale? Take a guess. I’ll wait.
November 18, 20213 yr 33 minutes ago, TEW said: And what percentage of our oil production do you think is from shale? Take a guess. I’ll wait. Right now? Probably somewhere around 20%. At its peak it was closer to 50% I believe. Take the L. Edit: after looking it up it's actually bit higher now, closer to 65%. I'd guessed that lower crude prices last year would've reduced the shake percentage. Whatever. It still doesn't make the US a "marginal producer" if oil. By your own definition a country has to produce low quantities AND have low profits. Even if shale reduces profits we still produce the most in the world - we're not a low volume producer therefore we are not a marginal producer. So again: take the L.
November 18, 20213 yr 11 minutes ago, JohnSnowsHair said: Right now? Probably somewhere around 20%. At its peak it was closer to 50% I believe. Take the L. Edit: after looking it up it's actually bit higher now, closer to 65%. I'd guessed that lower crude prices last year would've reduced the shake percentage. Whatever. It still doesn't make the US a "marginal producer" if oil. By your own definition a country has to produce low quantities AND have low profits. Even if shale reduces profits we still produce the most in the world - we're not a low volume producer therefore we are not a marginal producer. So again: take the L. To review: Shale is the marginal source for oil supply. 65% of US oil comes from shale. So, yes, the US is a marginal producer of oil. As demand increases, so does our production capacity to meet demand. Of course, everyone with a clue understands this, but for whatever reason you want to argue the point.
November 18, 20213 yr 33 minutes ago, TEW said: To review: Shale is the marginal source for oil supply. 65% of US oil comes from shale. So, yes, the US is a marginal producer of oil. As demand increases, so does our production capacity to meet demand. Of course, everyone with a clue understands this, but for whatever reason you want to argue the point. Dude, even without shale the US would be a top 5 producer of oil in the world. That a significant portion of our oil is sourced using a more expensive technique doesn't change the fact that we produce a significant portion of the world's oil - far too much to consider the US a "marginal producer". Take the L.
November 18, 20213 yr I think there's a confusion on terminology here. A marginal oil producer is an actual oil term industry term to refer to a company/oil field that operates at a profit on certain variables that include cost/price of oil. To be 100% crystal clear, The United States is not a marginal oil producer in the purest sense of the term or in practice. But in the United States there are a substantial amount of marginal oil fields, like shale fields, that simply don't produce income at a net positive rate given certain market variables.
November 18, 20213 yr 7 minutes ago, mayanh8 said: I think there's a confusion on terminology here. A marginal oil producer is an actual oil term industry term to refer to a company/oil field that operates at a profit on certain variables that include cost/price of oil. To be 100% crystal clear, The United States is not a marginal oil producer in the purest sense of the term or in practice. But in the United States there are a substantial amount of marginal oil fields, like shale fields, that simply don't produce income at a net positive rate given certain market variables. You’ve been in the Houston area too long
November 18, 20213 yr 1 minute ago, Dave Moss said: You’ve been in the Houston area too long It's osmosis. I need to get the F out of here.
November 18, 20213 yr 23 minutes ago, mayanh8 said: I think there's a confusion on terminology here. A marginal oil producer is an actual oil term industry term to refer to a company/oil field that operates at a profit on certain variables that include cost/price of oil. To be 100% crystal clear, The United States is not a marginal oil producer in the purest sense of the term or in practice. But in the United States there are a substantial amount of marginal oil fields, like shale fields, that simply don't produce income at a net positive rate given certain market variables. Sure. And even with the marginal crude oil sources considered the US is still not a marginal producer of oil in the world market. I was trying to give TEW the benefit of the doubt that to was misinterpreting his term, but...
November 18, 20213 yr 8 minutes ago, JohnSnowsHair said: Sure. And even with the marginal crude oil sources considered the US is still not a marginal producer of oil in the world market. I was trying to give TEW the benefit of the doubt that to was misinterpreting his term, but... Yeah, you’re giving me the benefit of the doubt
November 18, 20213 yr 4 hours ago, we_gotta_believe said: ^a maga moron just coming to the realization that he is illiterate You calling someone else a moron........😆 Thanks
November 18, 20213 yr Good lord the stupidity. US shale production is the marginal producer in the industry because it is the highest cost producer. The issue right now is that despite high prices, many shale guys can’t restart production due to inabilities to access capital. Shale drilling is very capital intensive on the front end - once the hole is drilled, the costs drop and the well produces (but with a short life). So shale guys are constantly drilling when prices are high, and shut down when prices drop. That makes them the literal definition of a marginal producer. Frankly, they are TERRIBLE businesses. But seriously, go on talking about things you guys don’t understand.
November 18, 20213 yr 6 hours ago, vikas83 said: Good lord the stupidity. US shale production is the marginal producer in the industry because it is the highest cost producer. The issue right now is that despite high prices, many shale guys can’t restart production due to inabilities to access capital. Shale drilling is very capital intensive on the front end - once the hole is drilled, the costs drop and the well produces (but with a short life). So shale guys are constantly drilling when prices are high, and shut down when prices drop. That makes them the literal definition of a marginal producer. Frankly, they are TERRIBLE businesses. But seriously, go on talking about things you guys don’t understand. If that is what TEW was arguing I wouldn't have disagreed. But he was arguing that the US as a whole is a marginal producer because we use shale to produce a lot of our volume. My contention is that even without shale we'd be a top 5 producer of crude in the world. Our production overall is more sensitive to price swings than other nations - absolutely. And if you want to carve out shale as the marginal production within the US, then absolutely. But given that a substantial portion of our oil production still comes from means that aren't so sensitive to pricing I find it hard to buy that the US overall should be classified as marginal. Our production would still be high even if shale was eliminated, which seems to preclude it based on the definition TEW shared (which is why I asked him to define marginal producer).
November 18, 20213 yr 15 hours ago, JohnSnowsHair said: define "marginal producer" to me it would mean our production would be a fraction on the edges of our needs, and that most of our oil needs would be met by imports. that's just not true. and whether or not we export that oil, if we were to reduce our domestic production it would have huge impacts on the price of oil globally because our demand would presumably remain steady, forcing more imports. I may be misinterpreting what you mean by "marginal producer", but I don't see how you can call the country that quite literally produces more oil than any other country in the world is "marginal". This is me literally saying "look, here's what I take marginal producer to mean. I could be misinterpreting because I'm not an economist, so tell me what definition you're going by" TEW responds with "a company, country, etc. that produces a small amount of a product or crop with high production costs and little or no profit" I wouldn't say we produce a small amount even without shale, so as I read it I don't see how the US can qualify given that definition. If instead the contention is "much of our oil production is costly and sensitive to price changes" and that it doesn't matter that our traditional crude production is still high by global standards, then I think it's looking at it very differently, and in a way the the above definition lacks. As for TEW..
November 18, 20213 yr 3 hours ago, JohnSnowsHair said: If that is what TEW was arguing I wouldn't have disagreed. But he was arguing that the US as a whole is a marginal producer because we use shale to produce a lot of our volume. My contention is that even without shale we'd be a top 5 producer of crude in the world. Our production overall is more sensitive to price swings than other nations - absolutely. And if you want to carve out shale as the marginal production within the US, then absolutely. But given that a substantial portion of our oil production still comes from means that aren't so sensitive to pricing I find it hard to buy that the US overall should be classified as marginal. Our production would still be high even if shale was eliminated, which seems to preclude it based on the definition TEW shared (which is why I asked him to define marginal producer). The point is the price of oil is effectively driven by the cost of the last barrel needed to fill demand -- that will be the shale guys. However, shale guys can't access capital easily right now, and therefore that capacity isn't coming online. Historically, those guys would come on, flood the market, and drive prices down. It's why back in ~2014 OPEC starting pumping like mad -- they wanted to put the shale guys out of business. Yes, base production in the US doesn't swing much since it is profitable at lower prices (still not nearly as cheap as the ~9/bbl cost for the Saudis, but much cheaper than shale). Think of it like power production -- coal and nuclear plants always run, but when demand is high, the higher cost natural gas peaker plants come online. The inability of the shale guys to access capital is allowing the price of oil to continue to climb because that marginal supply can't meet the demand. As for why oil prices are spiking, there are a few factors: 1. Demand went from 0-100 as the pandemic ends. No market is set up to handle that kind of swing efficiently. Basically the same thing we are seeing in the supply chain -- you can't restart the engine from a cold stop so easily 2. The marginal, high cost producers (mainly US shale) can't get financing to re-start. There are a few reasons for this, but the main one is the rise in ESG investing which makes financing fossil fuel operations verboten. That doesn't impact baseload US supply because those operations are cash flow positive and self-funding. But the shale guys need access to cheap capital to drill holes and they can't get it 3. OPEC isn't increasing supply to meet the demand because they are minting money and know the shale guys are Fed To be clear -- the inability to access capital has very little to do with US government regulations and much more to do with the rise of ESG investing. Look at the price of coal -- it is skyrocketing because no one can get funding to bring on more supply. That mainly is because no banks, funds, etc. will lend to coal companies anymore, so they have to go to specialty lenders with much higher rates (making the operations much less profitable and requiring a much higher price to justify investment)
November 18, 20213 yr That's the picture I've put together based on what you've shared here and trying to inform myself on this. And I can buy that the US is the world's marginal producer because somewhere around 10% of the world's oil can be produced with US shale and tight resources, but that those resources are tapped mainly when the price makes it profitable to do so. What I still cannot accept is that the US on the whole is a marginal producer of oil. Our base production is just too high; even without shale we are a major producer of oil. So yes - we have probably the most control over marginal production because our shale and tight reserves are pretty high and we've tapped them before. I just don't think that makes us, at least within the definition TEW posted, a "marginal producer" of oil generally speaking. But I think that's a different argument. It's a stupid semantic argument, but I was high and feeling feisty.
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